Macquarie Group’s breadth, depth and reach in products and markets secures multiple wins

Macquarie Group’s offices in Sydney

The Energy Risk Asia Awards 2021 saw Macquarie Group win four accolades – Base metals house of the year, Commodities research house of the year, Derivatives house of the year, and Oil and products house of the year – reflecting its outstanding reach across product and service lines and into multiple markets across the Asia‑Pacific (Apac) region

In part, this is a function of Macquarie’s physical presence worldwide, including in Apac, with more than 2,100 staff across 44 offices – over 770 of whom are Apac based – providing 24-hour access to global markets with key hubs located in London, Houston, New York, Singapore and Sydney. Macquarie has been an active presence in the foreign exchange and metals markets for more than 30 years, agricultural markets for over 20 years and in the energy market for over 15 years, and remains committed to these markets and to the Apac region.

Complementing the breadth of its product and service offerings to its clients is Macquarie’s commitment to participating in all layers of the markets in which it is involved, including the physical trading of the underlying assets, which affords it the opportunity to solve problems for clients that combine Macquarie’s world-class hedging, financing and physical trading capabilities.

In the base metals sector, for example, Macquarie’s service runs all the way from mine financing, which encompasses equity financing, senior/mezzanine financing and prepayments against future physical delivery; working capital financing, including bespoke trade financing solutions; a range of instruments such as repo of base metal inventory held during voyage or at warehouse; to comprehensive risk management. Macquarie is a market leader in adopting and providing liquidity across new products/contracts, including London Metal Exchange scrap, cobalt and aluminium premiums.

These capabilities are also underpinned by the unique way in which Macquarie has integrated its leading research facilities into the centre of its overall product and services offering, with its dedicated Commodities Strategy team working closely with economists and other sector strategists, as well as dedicated fundamental desk analysts specialising in regions or products. Being located in offices in Houston, London, Shanghai, Beijing  and Gurugram, India, allows the team to conduct detailed fundamental analysis while viewing markets in a wider macrofinancial context, offering clients and internal stakeholders key decision-making support. It also allows Macquarie to offer clients a top-tier service in physical commodity marketing, financing, derivatives trading and investor products, creating a core requirement for market-leading research and analysis as Macquarie supports the green energy transition.

All three of these key qualities Macquarie uniquely combines were in evidence, not only in response to market turbulence at the height of the Covid‑19 outbreak in 2020 but also in its ability to identify and then capitalise on the unprecedented divergence in gold prices during that period between New York, London and China (Shanghai). Working in an integrated fashion, Macquarie’s trading team and the strategy analysts leveraged their detailed understanding of physical and derivatives markets to spot this emerging price divergence trend. At that point, Macquarie’s trademark speed and innovative approach enabled it to react quickly to allow clients to take advantage of this significant dislocation by developing over-the-counter relative-value arbitrage products between commodities exchange futures and Loco London, as well as commodities exchange and onshore Shanghai Futures Exchange gold futures.

Looking ahead, Macquarie is not only cementing its leading position in Apac for such products and services but is also advising clients on how to approach and capitalise on new challenges emerging from the world’s shift towards lower carbon emissions. Macquarie has brought together all of its expertise in research, strategy, financing, trading and risk management to help its clients prepare for this energy transition, including collaborating with colleagues from other Macquarie divisions, such as Macquarie Asset Management and Green Investment Group, to launch an internal Climate Intelligence Unit.

For individual clients, the team is helping them better understand their absolute and relative positioning with regard to emissions, advising them on the steps they can take to improve their carbon footprint and how to effectively communicate these improvements to investors. Examples of this initiative include deep-dive assessments into the carbon intensity of various oil-producing fields worldwide and Commodities Strategy team calculations on the carbon intensity of individual downstream refining facilities.

This deep expertise, as well as leading execution capabilities, demonstrates why Macquarie has been awarded four of this year’s Energy Risk Asia Awards.

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